Opinion: America Leaves Itself Behind

(Wall Street Journal)

A world of trade deals without the U.S.

President Obama heads for Asia this week to talk about U.S. economic recovery and reform, and one theme that we expect he'll hear from Asian leaders is this: America is leaving itself behind as the rest of the world tries to liberalize trade.

The numbers tell the story. At least 266 bilateral or regional trade deals are in force, according to the World Trade Organization, and there are roughly 100 more of which the WTO has not yet been formally informed. The U.S. is a party to only five of the 64 trade pacts that have taken effect since 2005 – with Australia, Morocco, Bahrain, Oman and Peru.

In contrast, eight of those 64 deals involve the European Union (plus a round of EU expansion) and Japan has signed nine. Overall the U.S. has trade deals with only 17 countries including Canada and Mexico under Nafta. The EU has struck 29 deals on trade ranging from customs unions to larger free-trade agreements with 40 economies.

Of the deals the WTO knows about, an average of seven took effect each year in the five years after the WTO's founding in 1995. For 2004-2008, the annual average rose to 15. Another 12 have kicked in this year. New Zealand and Malaysia signed a pact last week, for instance, and China and India are in talks. Oh, and there's also the newly signed EU-Korea trade deal, and the one signed last year between Canada and Colombia.

These deals are proliferating for many reasons. Some countries are losing patience with the Doha round of global trade talks that has dragged on for eight years. Others view bilateral deals as a way of liberalizing beyond what Doha would accomplish – including areas like intellectual-property protection. These deals can also firm up alliances or build political influence, which is one reason China is aggressively pursuing trade deals with its neighbors. Read more here.